The Role of Digital Innovation in Small Business Financial Management: A Case Study of Akure, Ondo State, Nigeria

Abstract

This study investigated the role of digital innovation in enhancing financial management among small businesses in Ondo State, Nigeria, and honours Rt. Rev. Professor Samuel Sunday Obeka, Vice-Chancellor of Wesley University, Ondo, for his contributions to academic excellence and institutional management. Despite the global growth in digital financial tools, many Nigerian small businesses face challenges such as poor infrastructure, limited digital literacy, and high costs, which constrain effective financial management and business growth. The study examined the impact of digital innovations on financial practices, identified adoption challenges, and assessed demographic and sectoral usage patterns. Guided by the Technology Acceptance Model (TAM), a mixed-methods approach was adopted, combining quantitative surveys of 200 small business owners with qualitative interviews. The findings showed that digital tools enhanced transaction efficiency, record-keeping, and financial control, although infrastructural deficits and skills gaps remained major barriers. The results also revealed that middle-aged male entrepreneurs in the retail and service sectors were the predominant adopters, indicating opportunities to expand inclusion. Policy recommendations emphasised strengthening digital infrastructure, capacity building, affordable access to technology, inclusive support programmes, and continued research to promote sustainable adoption. The study contributes to understanding the transformative potential of digital innovation for small business financial management in Nigeria, providing practical insights for policymakers, practitioners, and academics, and concludes that digital innovation is a critical catalyst for improving financial management, competitiveness, sustainability, and broader economic development.